I was recently quoted in the Washington Examiner in an article about the tax credit for military, diplomatic, and intelligence personnel; as is often the case with those sorts of articles, though, space constraints meant that a lot of the details that I gave to the reporter ended up not being published, so I thought I would give people the fuller story here.

Many people are aware of the tax credit of $8000 that was available to some homebuyers who got a contract to purchase a home before April 30, 2010, and closed on that purchase by June 30, 2010 (recently extended to September 30, 2010). Since members of the military, intelligence, and diplomatic communities who were posted abroad during the main eligibility period for that tax credit did not have the same opportunity to take advantage of it, Congress also extended the eligibility period for those communities; even though it is the same tax credit as the original one, and even though it applies to groups other than the military, many people in the press are referring to it as the “Military” homebuyer tax credit.

Here’s the full response that I sent to Deborah when she inquired about the “Military” tax credit and whether we were expecting surges in homebuying activity as a result of that credit and/or the BRAC base relocations that will be bringing thousands of new military jobs to the DC area:

I work with a lot of clients who are eligible for the extended homebuyer tax credit, which actually applies to not just the military, but also to members of the Foreign Service and the intelligence community.

Members of those groups moving to DC have been using the original tax credit in about the same amount as other groups up until now; we’re expecting that usage of the new extended credit will drop somewhat among military folks, though, because one of the requirements for using the new extended credit is that the buyer needs to have been deployed abroad for at least 90 days at some point in 2009-2011 to be eligible to use it–many of the folks who are moving to the area for BRAC have not been actively deployed during that period, and thus can’t take advantage of the credit. We do expect to see an increase in members of the FS and intel communities using the credit this summer, though, as people posted abroad often rotate back to DC, and frequently want to purchase a residence in the area when they do; those rotations tend to happen during the summer, and the extended credit requires contracts to purchase by April of 2011, so the majority of FS/intel buyers using the credit will probably be doing so in the summer of 2010.

With regards to BRAC movements, we’re expecting a fair amount of homebuyer activity around Ft. Belvoir, Andrews AFB, and Ft. Meade. Based on the estimated schedules available for BRAC moves, though, it will be a while before we see that activity really pick up: we expect that the moves will happen in two surges, with one in fall/winter ’10 (about 25% of the moves scheduled) and another in summer/fall ’11 (the other 75%). The commercial market seems to be matching that expectation; COPT just announced yesterday that they were going to be building nearly a million square feet of commercial space in Springfield to serve vendors working with BRAC-relocated agencies such as NGIA, but they aren’t even starting construction until the end of 2010.

(I talk about the summer of 2010 as if it’s in the future because this conversation was happening back in May, before DC became a fetid crockpot that braised us into knowledge that summer had, in fact, started.)

If you’re a member of the miiltary, intel, or diplomatic communities and have any questions about the tax credit eligibility extension or about buying a home in the area as part of a BRAC relocation, feel free to contact us. And if you’re a reporter with a question about the mortgage or real estate market in the Metro DC area, we’re always glad to answer your question or put you in touch with someone who can. (Note, however, that we prefer not to opine for the media on the national real estate market as a whole. For one thing, there really isn’t a national real estate market per se. For another, what few trends there are in a national market like ours are so complex that our answer would be full of caveats and statistical jargon that most reporters would be forced to elide, and then we’d be grumpy about the result.)

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